NEW DELHI: Despite the government issuing an advisory against electronic cigarettes and asking all states to consider banning the product, several stores continue to sell them online. But that’s not the news. It’s that companies betting big on India to expand their business as part of their broader strategy.
If reports are to be believed, US-based e-cigarette firm Juul Labs Inc is eyeing Asian markets after a spectacular run in the US and is hoping to launch its products in India by late 2019.
After recruiting Zomato executive Anubhav Soni to oversee strategy and planning in India, Juul this month hired India-based Mastercard executive Rohan Mishra as head of government relations. It plans to hire at least three more executives, LinkedIn job postings showed.
Juul is also said to be mulling a new India subsidiary.
However, Juul indicated that although there are no “definitive plans”, India was among the Asian markets under evaluation. “As we explore potential markets, we are engaging with health regulators, policymakers and other key stakeholders,” it said.
If everything goes as per the plan, Juul would face competition from leading players in India’s $10 billion cigarette market — ITC and Godfrey Phillips — which sell e-cigarettes as well. But, will Juul’s road to success be equally easy in India?
“...we believe, it will be challenging,” said Abneesh Roy, senior vice-president at Edelweiss Financial Services. Roy added that vaping economics are way different in India than in the US.
While in the US, smoking Juul is substantially cheaper than smoking a regular cigarette, in India, it’s twice expensive. Further, Indian regulators are increasingly ruling against e-cigarettes, with eight states having already banned them and others prompted to follow suit.
“In this regulatory and pricing backdrop, we believe Juul can develop a niche market for itself in India, but offtake by mass smokers is likely to be limited and thus potential impact to ITC would be NIL to negligible,” he said.
ITC maintains that it does not expect the e-cigarette market to pick up in India and hence will be present through Eon.